As market volatility and interest rate uncertainty increases, retirement plan advisors are looking to help plan sponsors build more resilient portfolios. According to BlackRock’s 2024 Read on Retirement: Advisor Outlook, more than 450 plan sponsors, 300 retirement plan advisors, 1,300 workplace retirement plan savers, 1,300 independent savers, and 300 That’s why advisors are focused on implementing income strategies for retirement workplace savers.
“Retirement advisors are looking for solutions to help more Americans achieve a better retirement,” said Carrie Schroon, head of BlackRock’s U.S. defined contribution pension brokerage business. said. “Our research shows the importance of affordable solutions and access to education, an essential area for providers and participants alike.”
“Only 58% of plan sponsors believe their participants are on track to save for retirement (down from 64% in 2023), especially as people are living longer in the U.S. , living longer has become the biggest financial worry. We have lost the security that pensions once provided to many workers.
“Employers are concerned about the financial and emotional strain on their employees and are rallying for retirement benefits to foster long-term employee success. Our research shows that savers We found that 80% of respondents say their anxiety about outliving their savings is having a negative impact on their mental health today.”Also, 93% of respondents said their anxiety about outliving their savings is negatively impacting their mental health today.” respondents say knowing that they are healthy helps their mental health, which can have an important impact on productivity at work. As mentioned earlier, nearly all (99%) employers feel they have a responsibility to help their employees earn an income in retirement. ”
Retirement allowance demand
As concerns persist about saving for a long life, retirement solutions have become an area of focus for retirement planning advisors, with 81% of retirement planning advisors reporting that they discuss retirement with their DC clients. Interest in retirement continues to grow, with 82% of retirement advisors currently recommending a retirement solution or likely to do so in the next 12 months.
“Discussing retirement benefits has become a gamble for advisors, and they keep telling us that’s the case…” Schroon said. “Across the board, appetite and demand for retirement income solutions has never been higher. 99% of savers say having a guaranteed income in retirement would help them financially. Employers are right behind them: 99% of plan sponsors feel they have a responsibility to support their employees in generating income in retirement (and 72% say this is even more important in the current economic climate). ). That’s why we launched LifePath Paycheck, a retirement income solution, earlier this year. The retirement income solution will soon be solved by others. ”
Advisors are considering implementing these solutions as employers become increasingly concerned about preparing their employees for long-term retirement. Only 58% of plan sponsors believe their members are on track with their retirement savings, rising to 64% in 2023, according to BlackRock research. Despite the importance of retirement benefits, retirement plan advisors report that the biggest barrier to widespread adoption is communicating clear benefits. improving outcomes (44%) and providing clear education and communication to participants (42%).
Rob Crothers, Head of U.S. Retirement at BlackRock We are also calling for enhanced education for the future.” “This is why BlackRock has combined MyLifePath, a digital experience, with LifePath Paycheck, our investment solution that provides access to guaranteed income through target date funds. is designed to help educate participants on how that translates into income.”
Strengthening practice management
Retirement planning advisors believe that meeting the educational needs of participants is an important area for participant growth. More than half (55%) of retirement planning advisors say they differentiate their practice from other advisors through their expertise in meeting participants’ needs and education, including advice and retirement preparation. However, there are still opportunities for retirement planning advisors to develop educational programs for their clients. Fewer than half (48%) currently offer a financial wellness plan, despite this being an area that retirement planning advisors identify as a differentiator.
“Providing participant education is a key differentiator, with 60% of advisors saying they rely on plan sponsors to communicate and educate participants about the outcome-enhancing benefits of retirement income. ,” Schroon said. “55% of retirement planning advisors said they differentiate their practice by their expertise in meeting participant needs and education, including advice and retirement preparation, and nearly half (48%) currently To address these needs, we revamped our practice management suite earlier this year to support our plan advisors and wealth advisors in serving their clients. We will continue to build resources for
